Aid Allocation by German NGOs: Does the Degree of Public Refinancing Matter?

KOF Swiss Economic Institute Working Paper No. 247

26 Pages Posted: 25 Jan 2010

See all articles by Axel Dreher

Axel Dreher

Heidelberg University

Peter Nunnenkamp

University of Kiel

Susanne Thiel

affiliation not provided to SSRN

Rainer Thiele

Kiel Institute for the World Economy

Multiple version iconThere are 2 versions of this paper

Date Written: January 2010

Abstract

Using a new dataset for 41 German non-governmental organizations (NGOs), we analyze the allocation of NGO aid across recipient countries in a Tobit regression framework. By identifying for each NGO the degree of public refinancing, we address the largely unresolved issue of whether financial dependence on the government impairs the targeting of NGO aid. It turns out that German NGOs are more active in poorer countries, while they do not complement official aid by working under difficult local conditions. Beyond a certain threshold, rising financial dependence weakens their poverty orientation and provides an incentive to engage in “easier” environments. In addition, we find that the NGOs follow the state as well as NGO peers when allocating aid. This herding behavior is, however, hardly affected by the degree of public refinancing.

Keywords: NGO aid, aid allocation, public refinancing

JEL Classification: F35

Suggested Citation

Dreher, Axel and Nunnenkamp, Peter and Thiel, Susanne and Thiele, Rainer, Aid Allocation by German NGOs: Does the Degree of Public Refinancing Matter? (January 2010). KOF Swiss Economic Institute Working Paper No. 247. Available at SSRN: https://ssrn.com/abstract=1541932 or http://dx.doi.org/10.2139/ssrn.1541932

Axel Dreher (Contact Author)

Heidelberg University ( email )

Grabengasse 1
Heidelberg, 69117
Germany

HOME PAGE: http://www.axel-dreher.de

Peter Nunnenkamp

University of Kiel ( email )

D-24100 Kiel
Germany

Susanne Thiel

affiliation not provided to SSRN ( email )

Rainer Thiele

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, D-24100
Germany
+49 431 8814 215 (Phone)
+49 431 8814 500 (Fax)

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